Members of the Monetary Policy Committee (MPC) have asked the Central Bank of Nigeria (CBN) to top up the N50 billion Targeted Credit Facility (TCF) for households and small and medium enterprises (SMEs) to meet increasing demand for the Fund.
Festus Adenikinju, a member of the MPC, stated this in a personal statement at the last MPC meeting in July, released on Wednesday.
The CBN, in March 2020, set up the N50 billion facility to be disbursed at single digit through the NIRSAL Microfinance Bank for households and SMEs that would be particularly hard hit by Covid-19, including hoteliers, airline service providers, health care merchants, among others.
Godwin Emefiele, governor, CBN, disclosed at the last MPC in July that N49.195 billion out of the fund had been disbursed to over 92,000 beneficiaries.
However, according to Adenikinju, the economy and economic agents are responding positively to the current intervention programmes of the central bank and the government. “Regulatory measures to protect the financial sector are working well and should be monitored continuously,” he said.
Aishah Ahmad, CBN deputy governor in charge of financial system stability, said in her personal statement that sustained credit to the real economy – particularly for SMEs and households – would be crucial to economic recovery. “Therefore maintaining banking industry liquidity will be paramount,” she said.
Rogers Nwoke, national president, National Association of Microfinance Banks (NAMB), said the N50 billion was too small for the huge funding gap in Micro, Small and Medium Enterprises (MSME) working capital needs. Microfinance banks (MFBs), he said, disburse more than that in a month.
“You cannot get the needed traction by letting only one new MFB with limited spread to do these disbursements,” he said.
The CBN should make available another N50 billion through qualifying MFBs and the funds will reach MSMEs in less than one month, Nwoke told BusinessDay.
Mike Obadan, member of the MPC, said in his personal statement that implementation of most of the CBN policies, measures and interventions had begun. In the case of the N50 billion Targeted Facility, he said it had been oversubscribed by households and SMEs.
“This will need to be augmented by the bank while implementation of all the policy measures should be vigorously pursued in order to realise the set objectives,” Obadan said.
Obiora Kingsley Isitua, a member of the MPC, noted in his personal statement that 92,000 household and SME beneficiaries has received financial support to the tune of N49.2 billion and 61 manufacturing projects had been catalysed by injections of N152.9 billion, while the healthcare sector had been strengthened by support of N93.6 billion.
However, these disbursements are rapidly approaching the limits of these respective funds, he said, noting, “While the impact of these policies on the economy is undeniable, even more action is required to truly match the scale of effect of the pandemic.”
Reports of the implementation of the CBN’s COVID-19 intervention show significant progress in disbursements, according to Sanusi Aliyu Rafindadi, member of the MPC, in his personal statement. Over 152.9 billion (or 15.2%) of the N1 trillion targeted support for the Manufacturing sector has been disbursed.
Out of the N100 billion Healthcare funds, N26.278 billion (or 26.3%) has been disbursed to fund 20 projects in the healthcare sector. Additional 16 applications totalling N67.413 billion were under processing. Out of the N50 billion Targeted Credit Facility for Households and MSMEs, N49.195 billion have been disbursed to 91,736 beneficiaries, and N1.5 billion was disbursed to 169 beneficiaries under the Creative Industry Financing Initiative. Under Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS), N41.41 billion has been disbursed to 11,613 beneficiaries.
In his personal statement, Emefiele said the CBN would continue its drive to de-risk lending and increase targeted intervention to strategic high impact private sector ventures through effective collaboration of all stakeholders, especially on the backdrop of the imminent economic downturn.
